Jessica Lessin thinks mainstream publications’ interest in tech waxes and wanes depending on the headlines.
“It was very high when they were all looking to mitigate an expected lack of interest in political news post Trump so they ramped up writing about Elon Musk or something to try and compensate that, but I find that it’s sort of fickle and in my mind very tied to the traffic zeitgeist of the moment,” she said over Zoom from San Francisco, where she is based.
It’s for this reason the former tech and media reporter at The Wall Street Journal founded tech website The Information eight years ago, noticing a gap in the market for in-depth reporting on the ever burgeoning tech world. “Our bread and butter is understanding technology companies and how they’re changing every industry.”
Instead of taking ads, the site offers a $399-a-year subscription for full access, a move which many other publications thought was “crazy” at the time, according to Lessin, noting that “now pretty much every single one is trying to do the exact same thing.” She declined to disclose subscription data, but told WWD the company is enjoying “very strong double digit growth year-over-year.”
The Information achieved profitability in 2016 and just before the pandemic struck it was reported that it was on track to reach $20 million in sales by the year end. But despite not being dependent on ads, the company was still negatively impacted and received a PPP loan that was worth somewhere between $350,000 and $1 million. Nevertheless, Lessin said “when we look at how we ended the year we don’t believe we were adversely affected” and is focused on expanding the business.
The team has now grown to around 50, with the majority split between New York and San Francisco. There’s also a bureau in Hong Kong and a few reporters scattered around London, Washington D.C., Seattle and elsewhere. And while some other media organizations are looking to reduce office space, The Information recently moved into a new space in New York City, with Lessin planning to grow the team further.
As for funding, the Harvard graduate, whose father is Jerome Vascellaro, COO of private equity firm TPG Capital, and whose husband Sam Lessin sold storage company Drop.io to Facebook for an undisclosed sum, originally self funded the company with less than $1 million and to this day still wholly controls it.
Here, Lessin talks to WWD about her $399-a-year subscription model, why a sale is not in the cards anytime soon, and how her friendship with some tech titans including Mark Zuckerberg does not impact her coverage of them.
WWD: Why did you set up The information?
Jessica Lessin: About eight years ago the prevailing trends with the rise of the internet were for new publications to launch with ad-based business models where they would chase clicks. And as a journalist at The Wall Street Journal for eight years I just thought our industry is going to need new business models as journalism transitions to digital. And if we don’t, we’ll be in the same click game that Facebook and Twitter and everyone else is just going to win and play much better. The second piece of it was also sensing an opportunity around how technology was covered. Back when I was starting The Information, there was a lot of hype around tech products and founders. There wasn’t a lot of deep business reporting about companies and their impact and that struck me also as a really urgent and important opportunity.
WWD: Do you take ads at all or is just a subscription model only?
J.L.: It’s subscription with a very small amount of sponsorship revenue of events and newsletters.
WWD: How much did the pandemic impact the company because, while you’re not dependent on advertising, you have an events business and other things that must have been affected?
J.L.: When we look at how we ended the year we don’t believe we were adversely affected. I think we had to shift and pivot and innovate a lot when it came to our events. We had been initially expecting a lot of revenue around events that didn’t come in the way that we expected, but through virtual events and other products we were able to end the year in a good place.
WWD: Do you ever turn the paywall off for certain stories?
J.L.: We experiment all the time with how to let readers sample content. We have ways that readers can unlock certain stories in exchange for their email address. We also have a whole crop of new newsletters that you can start reading for free. At the end of the day we really focus on serving our community of subscribers and not growing our number of subscribers and I think that focus has been really important.
WWD: You just mentioned newsletters. Have they become increasingly important to you over the past year and how are you dealing with all the competition in that area?
J.L.: We’ve launched a bunch of new newsletters over the past year. Our approach has been to really drill down into the huge areas that we think are under covered at the intersection of technology and other industries, so we launched our creator economy newsletter that really studies the business of the world of creators and the platforms that are trying to serve them. We’ve done the same around virtual and augmented reality. We’ve even launched one devoted to batteries and electric vehicles, as well as crypto. We’re big believers in newsletters, but I think it’s taken a somewhat different approach that instead of viewing them as high-level aggregation or really personality-driven columns, we’re using them for really in-depth daily reporting on areas that we think warrant a lot more attention. To your question of how to compete, I think for us it’s just always been about stories other people don’t have.
WWD: Can you talk me through some of your other revenue streams other than subscriptions?
J.L.: The vast, vast, vast majority of our revenue is our core $399-a-year subscription product. I think that does make us really unique in the media world where I think you’ve seen a lot of businesses sort of throw spaghetti against the wall a little bit in trying to come up with ways to make money off their journalism. What we found time and time again is simply the formula is just to do great journalism and when we do, we see [a] huge influx of subscribers around that work, so we’ve really stayed focused on that business model. Additionally, we are ramping up and expanding our sponsorship and brand partnership products. We hired a senior executive from Forbes and Time toward the end of last year and that business is somewhere in the 400/500 percent annual growth. There’s huge potential there.
WWD: How important are events?
J.L.: Events are a huge part of the community we’ve built and have been from Day One. I think we take a different approach to them. It’s not just about putting talking heads on a stage or working with brands and throwing their logos up on your website. It’s really about what are the most important topics and who are the most important leaders that people need to hear from today. If you look at WTF — our women’s event — we’re going to be digging into the topics of really speed and growth and looking at how during these incredibly challenging times for so many people, tech media and finance have kind of been on these rocket ship trajectories. It’s designed really for women on every rung of the professional ladder to learn something and get an edge in their career. I think many other events — particularly those targeting women have historically targeted the women who made it — the C-suite, the CEOs. In many cases, they charge tens of thousands of dollars to attend these events and so another thing we’re really trying to do with WTF is to make it more accessible.
WWD: Is it virtual?
J.L.: This year it most likely will be. We were hoping to incorporate a little bit of hybrid, but like everyone else this fall I think people are sticking to virtual for now. We’ll seek in the future to have a balance of both because there’s certainly something there.
WWD: What are the most important issues you’ve been tracking in Silicon Valley?
J.L.: I mentioned the creator economy, which I think many publications think of as “oh, there are these influencers out there who are getting free things and making money,” but we really see that as a fundamental shift in the business models of consumer internet companies. That’s a huge one. Then just the ongoing power and growth of all large tech companies — Apple, Amazon, Google, Facebook. Again, while it’s been a devastating year for so many parts of the economy, these companies are record usage, record revenue, record profits, record market caps and I think the stories of what’s happening behind the scenes and the challenges that poses, as well if you look at regulation, there’s a huge story. I also think one of the themes which we’ve consistently been ahead on is diversity in Silicon Valley and looking at that from so many different angles — whether it’s looking at the really low proportion of female investors to the broader question of why haven’t companies expanded their diversity at the rate that they want to. This pandemic has held a lot of women back and we’re seeing even reversals in percentage gains in terms of, say, women raising venture capital money because I think what’s happening is you have a lot of investors who are getting very conservative, so they’re not taking as much risk. And I put “risk” in quotes because they’re betting on the types of founders they’ve always funded.
WWD: Do you think big tech will be more heavily regulated in the future?
J.L.: For sure regulation is likely to step up in very dramatic ways. The large tech companies know that, aren’t surprised by that, have teams of lawyers prepared for that. I also just think it will be part and parcel of the industry that there will always just be that cat and mouse game.
WWD: You’ve been ahead of the curve in reporting many of these issues. Is mainstream media catching up with you now and how are you dealing with that competition?
J.L.: I honestly feel like there’s so much terrain because if you look at the influence that any of these companies or tech companies — from small start-ups to huge companies — have on our lives and businesses, I honestly feel like you could have thousands more tech reporters and still not be close to unearthing all the important stories.
WWD: You mentor some other news start-ups such as The 19th through The Information Accelerator. Why is that important to you?
J.L.: When I set out to build The Information, there weren’t many models of people who had started a news business in the way we had — with the business model we had or the female founder, and I think it was really important to me to share some of what we had learned because it’s frankly not rocket science.
WWD: How does The Information Accelerator work? Do you charge companies?
J.L.: We have a couple different variations of it. In some cases, we’ve put in a small amount of capital in exchange for a small revenue share and in other cases, it’s been less formal and more just trying the mentorship without the business component, so there are a couple different models.
WWD: As a journalist, you’ve been covering start-ups for many years, was there anything that really shocked you or surprised you when you launched one?
J.L.: One thing that consistently surprised me is how much time great founders or founders who want to be great spend on recruiting and team building and managing and mentorship.
WWD: Just in terms of the really big names you cover, there has been a bit of criticism around your friendships with people like Mark Zuckerberg. How do you deal with that?
J.L.: I think that was a little bit in the beginning we would hear that, but anyone that follows our journalism knows we don’t pull our punches so I think anyone that reads The Information and sees what we do will see we’re probably the toughest outlet when it comes to covering tech. So we just stick to doing the journalism and letting it speak for itself.
WWD: It was reported that the FT approached you about a sale in 2019. Is a sale something you would consider in the future?
J.L.: It’s not something we’re at all focused on right now. We’re building this business for the very, very long term. I do think it’s awesome that we just saw the Politico/Axel Springer deal, which is an incredible deal that really validates the tremendous business that Politico has built so I was very excited to see that, but it doesn’t affect us.
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